Section 21 Accelerated Possessions at Record High

Between October and December 2015, total evictions hit a record high of 42,728, according to the Ministry of Justice (MoJ).

Although overall possession claims dropped over the year, to 148,043, the amount of accelerated possession cases continued rising, reaching 37,663 in 2015, up by 4.5% on 2014 (36,025) and 10% on 2013 (34,080).

The founder of Landlord Action, a specialist landlord possession firm, Paul Shamplina, believes that the increase in evictions and use of section 21 accelerated possession claims is a reflection of the housing crisis and the impact of increased legislation on the private rental sector.

Section 21 Accelerated Possessions at Record High

He says: “Rising rents and welfare cuts are undoubtedly to blame for the growing number of evictions. With a shortage of affordable properties, particularly in the capital, the imbalance of supply and demand has pushed rental inflation well beyond the levels at which tenants’ wages have risen. Many simply can’t keep pace and are falling into arrears. We’re seeing more subletting scams and cases of tenants renting out properties on holiday websites in order to cover their rent than ever before.”

MoJ figures show that the proportion of claims made using the accelerated process has risen from 7% in 1999 to 25% in 2015.

Shamplina cites several reasons for this: “Rising house prices, uncertainty over future buy-to-let tax implications and concerns over increased legislation – such as Right to Rent and the Deregulation Act – have been the catalysts for many self-managing landlords to consider selling up. They use section 21 as a way to gain possession of their property as quickly as possible.”

In some instances, when tenants are in rent arrears, Landlord Action believes that many landlords still opt to use a section 21, rather than a section 8 notice.

Some landlords don’t think they will be able to collect rent arrears, so a section 21 allows them the automatic right of possession without having to give any grounds once the fixed term has finished.

Shamplina adds: “A section 21 usually enables landlords to gain possession much quicker on a no fault basis, so they can re-let the property, which is often more financially viable than chasing arrears. I believe use of the section 21 process for landlords will continue to grow year-on-year, because of councils pushing the problem back onto private rental sector landlords.”

If your tenants have fallen into rent arrears, remember that rent guarantee insurance is the best way to ensure you still get paid.